5G Patent Licensing Wars Begin: Nokia undercuts Ericsson and Qualcomm on royalties for 5G smartphones
On August 21st Nokia announced its patent-licensing rate for 5G smartphones at €3 (~$3.47) per smartphone. That rate appears to be less than what Qualcomm and Ericsson are charging for their own 5G patents.
“Nokia innovation combined with our commitment to open standardization has helped build the networks of today and lay the foundations for 5G/NR,” said Ilkka Rahnasto, head of patent business at Nokia. “This announcement is an important step in helping companies plan for the introduction of 5G/NR capable mobile phones, with the first commercial launches expected in 2019.”
For other categories of devices, Nokia said it will determine its licensing rates separately “and seeks to engage in constructive dialogue with relevant industry participants to define the licensing models best suited for those industries.”
Nokia’s announcement underscores what will be a major element in the growth of the 5G industry. The companies that have contributed to the 3GPP relase 15 New Radio (NR) spec are all likely looking to cash in on patent-licensing agreements. That’s even though 3GPP won’t submit it’s IMT 2020 RIT proposal to ITU-R WP 5D till July 2019!
Already some of the global wireless industry’s biggest players have outlined their patent-licensing positions on 5G, even though there won’t be a standard (ITU-R’s IMT 2020) for more than two years.
Qualcomm late last year said that it could charge smartphone manufacturers up to $16.25 in royalties for every 5G phone they sell. However, $16.25 per 5G phone is not necessarily the exact price that 5G handset makers would pay; the company said its rates would vary depending on exactly what kinds of technologies were included in the license, as well as what types of devices manufacturers would sell. Furthermore, Qualcomm indicated in April the company will adjust its patent-licensing terms, which some analysts said could result in a reduction in licensing fees paid by some of Qualcomm’s bigger customers, like Samsung. Last November, Qualcomm announced it would charge up to $16.25 in royalties for 5G smart phones.
Similarly, in March of last year, Ericsson said it would charge $5 per 5G phone, though Ericsson said it might reduce that rate to $2.50 per phone under “exceptional circumstances.” The company states on its website:
5G standardization is supported by the patent and licensing process, and will boost performance between networks, devices and operators, creating new revenue streams with radical new business models and use cases. Progress on the 5G standardization front will also bring enormous opportunities to the way we use our devices to communicate with our surroundings, revolutionizing key industries globally, including: TV and media; manufacturing; healthcare; telecommunications; and transportation and infrastructure.
Monica Magnusson, VP of IPR Policy at Ericsson recently wrote: “5G will offer a $619 billion revenue opportunity by 2026 globally. The new possibilities and innovations that 5G will enable seem exciting but harnessing the potential business value and societal benefits from technological breakthroughs will require a commitment to making this technology accessible. That’s why consensus-based standards and fair patent licensing must be prioritised.”
Nokia, Qualcomm and Ericsson are all working to increase the revenues that they derive from patent licensing. During the Nokia’s second-quarter earnings conference call with analysts, Nokia’s CEO Rajeev Suri said that “We expect our current portfolio strength both to continue for many years to come and to give us considerable monetization opportunities. … We’ve always had clear and ambitious targets for new patent creation and we are constantly adding new patents to our portfolio while still maintaining a high-quality threshold.”
IHS Markit: 82% of the world’s largest cellcos are testing “5G” – 2 years before IMT 2020 standard is complete
IHS Markit says that 82% of mobile operators participating in its recent 5G study are busy trialing and testing the technology, mainly in North America and Asia. “Get ready, 5G is around the corner,” said Stéphane Téral, executive research director, mobile infrastructure and carrier economics, IHS Markit.
–>That’s despite the IGNORED REALITY that the true and only 5G standard- IMT 2020- is over 2 years from completion!
“5G is going live in North America by the end of 2018, and then in South Korea in 2019. Most operators in Europe, however, aren’t planning to deploy 5G until 2021 or later,” Teral added.
Eighty-two percent of operators polled for the study, entitled “Evolution from 4G to 5G: Service Provider Survey,” rated ultra-low latency (ULL) the chief technical driver for 5G, followed by decreased cost per bit (76%) and increased network capacity (71%). The participants were 17 of the world’s largest mobile operators with a combined 43% of the world’s 6 billion subscribers.
“Every technical aspect that’s related to substantial improvement in network performance — lower latency, higher capacity, higher bandwidth, higher throughput — while decreasing the cost per bit continues to receive high ratings in our survey,” Téral said. “This is logical because it’s the foundation of the 5G definition.”
Radio remains the most challenging network development item on the 5G agenda with 53% of operator respondents noting that radio is the area of the network that will require the biggest development effort to make 5G happen, followed by transport (24%) and management (14%).
Extreme mobile broadband (eMBB) was the highest-rated 5G use case driver among survey respondents, followed by real-time gaming. As real-time gaming requires a super-fast network with low latency, it cannot occur in the absence of eMBB; the same applies to high-definition (HD) and ultra-high-definition (UHD) video services and tactile low-latency touch and steer.
Even so, respondents expect fixed-wireless access (FWA) to be ready for commercial deployment first.
“The bottom line is early 5G will be an extension of what we know best: broadband, whether in FWA or eMBB form,” Téral said. “Don’t expect factory automation, tactile low-latency touch and steer, or autonomous driving to be ready on 5G any time soon despite being touted as the chief 5G use cases.”
About the survey
The “Evolution from 4G to 5G: Service Provider Survey” assesses 5G technologies, market trends and mobile operator plans for deploying 5G networks. For the study, IHS Markit interviewed 17 of the world’s largest service providers, who together have 43 percent of the 6 billion mobile subscribers worldwide. Respondents to the survey have detailed knowledge of the mobile network infrastructure and technologies operated by their companies, and they are influential in planning and making purchase decisions for mobile network equipment.
References:
https://ihsmarkit.com/topic/technology-critical-insights-5g.html
https://technology.ihs.com/605082/evolution-from-4g-to-5g-service-provider-survey-2018
Super fast broadband boosts UK business; Calls to break up BT & sell Openreach
The roll out of super fast broadband in the UK has increased revenues for businesses and created jobs, says a report by the UK Department for Culture, Media and Sporttitled: “The Evaluation of the Economic Impact and Public Value of the Super fast Broadband Programme, covering 2012 to 2016.”
“We’ve also recently introduced a raft of lower wholesale prices to help drive higher take-up of faster fiber services which will help to further fuel the boost to the UK economy,” Openreach chief Clive Selley said.
https://www.bbc.com/news/business-45238452
https://www.gov.uk/government/news/need-for-speed-drives-superfast-broadband-boost-for-wales
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From the FT (see reference below):
KT to build fiber optic network in Philippines as part of $1.8B broadband project
KT Corp, South Korea’s largest telecommunications network operator, will participate in a nationwide project to greatly improve Internet connectivity in the Philippines, gaining a major foothold in the Southeast Asian country and neighboring region.
KT signed a 53 billion won (US$ 47 million) contract last week with the Philippines’s Converge ICT Solutions Inc. to build an optical fiber network along some 1,570 kilometers (975 miles) of main roads in the northern region of Luzon. The company hopes the contract will lead to more business partnerships with the top Philippines Internet provider in the future.
The latest deal is part of Converge’s $1.8 billion endeavor to expand its broadband coverage throughout the Philippines over the next five years. KT is increasing efforts to expand its business presence and partnerships overseas, notably in Asia, Europe and Africa, with the company’s latest Internet solutions, including GiGA Wire, GiGA WiFi and GiGA LTE.
“The partnership with Converge ICT Solutions is a great opportunity to introduce our technological expertise in telecommunications network planning, construction and operation not only in the Philippines but also in neighboring countries,” said Yun Kyoung-Lim, head of KT’s future convergence and global businesses. “KT will continue its efforts in representing the Republic of Korea to the world as the global ICT leader.”
KT is a global leader in next-generation wireless technology. The company is preparing for the commercial launch of the country’s first nationwide 5G network early next year and successfully showcased trial 5G services with the world’s first 5G-ready network. The company is also a pioneer in future technologies such as artificial intelligence (AI), autonomous driving, and virtual and augmented reality (VR and AR).
In recent years, KT has installed more than 5,500 kilometers (3400 miles) of optical fiber networks in Myanmar, Bangladesh and other countries. For the Philippines-based project, the company plans to cooperate with many Korean small- and mid-sized companies, which have proven their high quality through previous overseas projects. KT expects to have more business opportunities in the Philippines, including smart energy, corporate and public innovations, and disaster and safety management.
The Korean telecom leader also signed an agreement last month with Germany-based albis-elcon to provide its GiGA solutions and next-generation technologies to communications service providers in Europe and other parts of the world. KT is also now working on various projects to improve ICT infrastructure in Africa, including broadband networks in Rwanda, Gabon and Botswana and a public security network in Angola.
Luzon is the largest of more than 7,000 islands in the Philippines and is home to the Southeast Asian country’s capital, Manila. More than half of the country’s population, estimated at over 106 million, live on Luzon. Because the country consists of so many islands, the Philippines has experienced difficulties in improving its Internet speed and telecommunications service environment.
When the optical fiber cables project in Luzon is completed in June 2020, a great number of people in the Philippines are expected to benefit from high-speed home Internet connections. Philippines President Rodrigo Duterte has established the Department of Information and Communications Technology, and the administration is promoting e-government services and ICT development.
About KT:
KT Corporation, Korea’s largest telecommunications service provider reestablished in 1981 under the Telecommunications Business Act, is leading the era of innovations in the world’s most connected country. The company leads the 4th industrial revolution with high speed wire/wireless network and innovative ICT technology. After installing 4.5 million fixed lines for 20 million users in just 12 years, KT was the first telecom provider to introduce 5G broad-scale trial service in 2018. It is another step in KT’s continuous efforts to deliver essential products and services as it seeks to be the No.1 ICT Company and People’s Company.
For more information, please visit our English website at https://corp.kt.com/eng/
Cogent Communications still growing strongly -18 years after the Fiber Optic Bust
Cogent Communications, one of the world’s largest ISPs, is carrying more traffic on its network than most incumbent telcos. During its most recent earnings report, Cogent said its quarterly traffic growth came in at 10%, while year-over-year traffic growth hit 44%. Let’s break that down into on-net and off-net services/customers:
On-net service is provided to customers located in buildings that are physically connected to Cogent’s network by Cogent facilities. On-net revenue was $93.0 million for the three months ended June 30, 2018; an increase of 0.7% from the three months ended March 31, 2018 and an increase of 8.7% over the three months ended June 30, 2017. Cogent’s more than 65,000 on-net customer connections and its nearly 2,600 on-net office buildings and carrier-neutral data centers send traffic over its all-IP-over-DWDM network, protected at Layer 3, using Ethernet as its network interface. On-net customers are obviously the most profitable customers for Cogent.
Off-net customers are located in buildings directly connected to Cogent’s network using other carriers’ facilities and services to provide the last mile portion of the link from the customers’ premises to Cogent’s network. Off-net revenue was $36.1 million for the three months ended June 30, 2018; the same amount as the three months ended March 31, 2018 and an increase of 6.3% over the three months ended June 30, 2017.
Total customer connections increased by 13.8% from June 30, 2017 to 76,193 as of June 30, 2018 and increased by 3.1% from March 31, 2018. On-net customer connections increased by 14.1% from June 30, 2017 to 65,407 as of June 30, 2018 and increased by 3.2% from March 31, 2018. Off-net customer connections increased by 12.3% from June 30, 2017 to 10,480 as of June 30, 2018 and increased by 2.3% from March 31, 2018. The number of on-net buildings increased by 161 on-net buildings from June 30, 2017 to 2,599 on-net buildings as of June 30, 2018 and increased by 58 on-net buildings from March 31, 2018.
Cogent classifies all of their customers into two types: NetCentric customers and Corporate customers.
- NetCentric customers buy large amounts of bandwidth from us and carrier neutral data centers and our Corporate customers buy bandwidth from us in large multi-tenant office buildings. Revenue in customer connections by customer type. There were 33,520 NetCentric customer connections on our network at quarter-end, which declined from last quarter due to significant circuit grooming, consolidating multiple 10 gig circuits to fewer 100 gig circuits at the same location from some of our larger NetCentric customers.
- Corporate customer revenue grew sequentially by 2.7% to $83.3 million and grew year-over-year by 11.9%. We had 42,673 Corporate customer connections on our network at quarter-end. Quarterly revenue from our NetCentric customers declined sequentially by 3.4% and grew year-over-year by 1.4%.
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CEO Dave Schaeffer’s Earnings Call Remarks:
The size and scale of our network continues to grow. We have over 927 million square feet of multi-tenant office space on-net in North America. Our network consists of over 31,900 metro fiber miles and over 57,400 intercity route miles of fiber.
Cogent remains the most interconnected network in world, where we are directly connected with over 6,360 networks. Less than 30 of these networks are settlement-free peers. The remaining over 6,330 networks are paying Cogent transit customers.
We are currently utilizing 27% of the lit capacity in our network. We routinely augment capacity in sections of our network to maintain these low utilization rates. For the quarter, we achieved sequential quarterly traffic growth of 10% in what is traditionally a slow seasonal period for traffic growth and we saw a significant improvement in our year-over-year quarterly traffic growth to over 44%.
We operate 52 Cogent-controlled data centers with 587,000 square feet of space and we are operating those facilities at 32% utilization. Our sales force turnover rate in the quarter was 4.8% per month, again better than our long-term average turnover rate of 5.7% per month. And I think a testament to the training and retention programs that we’ve put in place. We ended the quarter with 438 reps selling our services.
Cogent remains the low cost provider of internet access and transit services. Our value proposition to our customers remains unparalleled in the industry. Our business remains entirely focused on the Internet and IP connectivity and data colocation services. Our services provide a necessary utility to our customers. Beginning at the start of Q2 and April 1st, we began selling our SD-WAN services. We do not expect a material contribution from these services for the next several quarters.
We expect our annualized constant currency long-term revenue growth to be consistent with our annualized guidance of 10% to 20%, and our long-term EBITDA margin expansion rates to remain approximately 200 basis points per year for the next several years.
We expect to grow the sales force at between 7% and 10% per year for the next several years, while we expect operational head count growth to be slower at probably 2% to 3%. So the mix will increasingly become more sales-centric. Because of the efficiencies in running our business and the standardization of our products and the systems that we’ve deployed, we can sustain 44% traffic growth, 20% growth in unit number of connections and do that with a increase in operational and overhead employees of only about 2% to 3% per year. The sales force, however, is the engine that will drive accelerating revenue growth. And investing in that sales force has been and continues to be our major focus.
Analysis:
Cogent is trying to provide the most bandwidth at the lowest possible price, which means it’s in a race to run its network at the lowest possible cost, which means it’s in a race to take every advantage of new optical networking and routing technologies, as soon as they’re available.
“We divide the network into four big technology regions — edge routing, core routing, metro transport and long-haul transport,” Schaeffer told Light Reading. “In all of those functional areas we are on our third generation of equipment — we’ve done two complete forklift upgrades in 19 years — and, you know, I’m sure we’ll go to a fourth generation soon,” he added.
Webcast Replays:
The KeyBanc Capital Markets 20th Annual Global Technology Leadership Forum was held at the Sonnenalp in Vail, CO. Dave Schaeffer will be presenting on Monday, August 13th at 10:00 a.m. MT. Investors and other interested parties may access the live webcast of the presentation by visiting the webcast page.
The Oppenheimer 21st Annual Technology, Internet & Communications Conference was held at the Four Seasons Hotel in Boston, MA. Dave Schaeffer will be presenting on Wednesday, August 8th at 1:05 p.m. ET. Investors and other interested parties may access the live webcast of the presentation by visiting the webcast page.
The Cowen 4th Annual Communications Infrastructure Summit was held at the St. Julien Hotel and Spa in Boulder, CO. Dave Schaeffer will be presenting on Tuesday, August 7th at 3:30 p.m. MT. Investors and other interested parties may access the live webcast of the presentation by visiting the webcast page.
Verizon & Nokia complete 3GPP NR vehicle handoff
Verizon and Nokia announced they were able to achieve a key milestone on the road to 5G: handing off a signal seamlessly to a vehicle traveling between two radio sectors. The test took place at Nokia’s Murray Hill, N.J., campus. A data transmission at 28 GHz was sent from two 3GPP New Radio (NR) radios on a Nokia building to a vehicle outfitted with a receiver and equipment to measure transmission statistics. The vehicle traveled between the two radios, achieving seamless NR Layer 3 3GPP-compliant mobility hand off of the signal between the two sectors, intra-gNB and inter-DU, according to the companies.
Verizon said that the call mobility test involved a data transmission at 28 GHz that was sent from two 3GPP compliant NR radios on Nokia’s building, to a vehicle that had a receiver and test equipment to measure transmission information.
“The vehicle traveled between the two radios, achieving seamless 5G NR Layer 3 3GPP-compliant mobility handoff of the signal between the two sectors,” Verizon said, noting that these were intra-gNodeB and inter-distributed unit handovers.
“Unlike some of the incremental 5G technology announcements we’ve seen lately, tests like the one we conducted are significant advancements in the development of 5G technology,” said Bill Stone, vice president, Technology Development and Planning for Verizon, in a press release. “By taking these tests out of the lab and into the field, we’re replicating the experience users will ultimately have in a 5G mobility environment,” he added.
“We are pleased to showcase the acceleration of the mobile capabilities in 5G,” said Marc Rouanne, president, Mobile Networks, Nokia, in the release. “Enhanced mobile broadband is one of the first services being delivered on Nokia’s end-to-end 5G Future X portfolio. As a result, we can help our customers meet their early 5G deployment schedules and initial coverage demands.”
Verizon plans to be the first to launch 5G residential broadband service in four markets this year: Los Angeles, Houston, Sacramento and Indianapolis. Verizon CEO Hans Vestberg told CNBC the operator is going to be first in the world with 5G. “We are building everything right now,” he said, with 5G mobile phones due in the hands of consumers next year.
References:
https://www.verizon.com/about/news/5g-move-verizon-and-nokia-complete-first-5g-nr-mobility-call
https://www.rcrwireless.com/20180817/5g/verizon-nokia-test-5g-nr-call-mobility
https://www.fiercewireless.com/wireless/verizon-nokia-complete-5g-nr-mobility-call
Samsung’s Digital City Provides a Glimpse of What’s Possible with 5G
Samsung’s digital city in South Korea showcases many of the perceived benefits of 5G. Samsung has deployed a 5G hot spot (or hot zone) within its campus to demonstrate how quickly a person in a moving vehicle could download and upload large video files to the network. The company’s pre-5G standard technology already supports some in-vehicle services, as well as smart city initiatives such as traffic, smart lighting and CCTV, and as it gains widespread coverage, even more innovations will occur.
Sporting venues will likely use 5G hot zones to deliver a new in-stadium fan experience that offers personalized video feeds of a customer’s favorite player to their mobile device. One example of this was the time slice feature that was available for the winter Olympics. Moreover, remote healthcare use cases will get a boost with better bandwidth to enhance the video and enable new use cases such as assisted surgery with augmented and virtual reality.
https://news.samsung.com/global/video-5g-city-samsungs-preview-of-the-5g-era
Cignal AI’s Optical Customer Markets Report: Optical spending up in China & NA; Down for cloud service providers & other regions
Cignal AI’s (Andrew Schmitt) latest Optical Customer Markets Report states that spending growth by cable Multiple System Operators (MSOs) led all other North American industry verticals during first quarter 2018. The report also reveals that contrary to continued increase in China’s optical spending, incumbent network operator spending in North America and Europe, Middle East and Africa (EMEA) on optical transport equipment continues to decline. Spending in North America grew 30 percent and outpaced all other customer verticals, including cloud operators.
Indeed, optical equipment spending by cloud operators has stalled due to rapidly declining prices and the use of IP-over-WDM as a substitute. Despite the downward trend, however, Ciena and Infinera continue to increase market share in the cloud optical network market.
“In North America, cable MSOs were the strongest performing customer market during the first quarter of 2018,” says Andrew Schmitt, lead analyst at Cignal AI. “Cloud operators are not increasing purchases of optical equipment, though common belief right now is just the opposite. The revenue growth from cloud operators experienced by Ciena and Infinera came at the expense of other vendors’ sales.”
Other key findings in the report include China being the largest source of optical hardware market growth, almost single-handedly representing the one-third global spending by Asia. Global spending by cable MSOs grew 5% year-over-year in the first quarter, with North America increasing 30%.
Other findings of the report were outlined in the press release and included:
- Ciena and Infinera sales growth in the cloud and colo market came during a period of overall spending decline among these customers (see above chart).
- Optical equipment spending by cloud operators has stalled, which contradicts the common perception that cloud operators like Amazon, Google and Microsoft are increasing spending on optical transport equipment. Growth in the cloud market has been inhibited by rapidly declining prices and the use of IP over WDM as a substitute.
- One third of global spending on optical hardware is in Asia, with almost all coming from Chinese incumbent operators.
- Cable MSO global spending grew 5 percent year-over-year in the first quarter.
Cignal AI’s Optical Customer Markets Report is issued quarterly and quantifies optical equipment sales to five key customer markets as well as equipment vendor market share for sales to cloud operators.
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From a separate Cignal AI market research report, here’s the latest YoY Revenue % increase/decrease for various segments of the optical networking market by country or region and Grand Total:
Chart courtesy of Cignal AI
AT&T to build “5G Evolution” connected community in Frisco Station, Texas
Frisco Station is a 242-acre, mixed-use urban development in Frisco, Texas. Located along Frisco’s North Platinum Corridor, Frisco Station includes office, residential and medical space, along with a retail and restaurant district.
On Friday, the entity announced plans to deploy integrated network connectivity from AT&T. Frisco Station said that the development will be one of the first connected communities in the nation built from the ground up with “5G Evolution” wireless technology from AT&T. The future deployments will include “wireless stealth micro cells,” fiber-based internet service and Wi-Fi throughout all common areas according to Frisco Station and AT&T.
“Frisco Station understands the future belongs to the individual,” said Ed Balcerzak, SVP of AT&T Connected Communities in a statement. “With this development, we’re working together to give you more of your thing and connect you to the people, information and entertainment you care about.”
“Stations are places where people go to make connections. That’s why the Frisco Station Partnership chose AT&T as its partner to implement a platform that can support a connected community at every stage,” said Mike Berry, president of Hillwood, Frisco Station’s master developer. “We believe we are creating a high-tech environment, unlike anywhere else in the country, that has the potential to change the way people think about what’s possible in their day-to-day interactions with people and information.”
AT&T highlighted that this investment in innovative technologies will allow Frisco Station to be ready for new innovations to be launched, like Uber Air’s first Skyport and the recently announced drive.ai autonomous vehicle pilot program.
“By proactively addressing current and future connectivity needs, Frisco Station will be prepared for greater reliance on smart devices and automated platforms for transportation, healthcare, entertainment and lifestyle advancements – connecting an anticipated 15,000-person daytime population, five million square feet of office and 2,400 urban living residents,” AT&T’s statement says.
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Frisco Station’s enhanced wireless technology is providing a platform to encourage connectivity between Frisco’s emerging corporate and entertainment destinations. Building a connected community from the ground up ensures that Frisco Station’s vision can be put into practice today and maximized well into the future.
About Frisco Station
Frisco Station is an unprecedented 242-acre, mixed-use development in Frisco, Texas that is created with a new approach to urban design based on the foundational principles of smart, creative and healthy experiences. It is among the first connected communities in the nation to be constructed from the ground up, which enables the development to offer innovative amenities that increase convenience and productivity. Frisco Station is served by one of the world’s first Skyports to support Uber Air’s unique flying taxis and is one of the first projects in the nation to be served by a network of autonomous vehicles. Located along Frisco’s highly desired North Platinum Corridor, Frisco Station features fully amenitized office, residential and medical uses, along with a robust retail and restaurant district that will be anchored by Alamo Drafthouse. The project is being developed by the Frisco Station Partnership, which is composed of The Rudman Partnership, Hillwood Properties and VanTrust Real Estate.
About AT&T Communications
We help family, friends and neighbors connect in meaningful ways every day. From the first phone call 140+ years ago to mobile video streaming, we innovate to improve lives. We have the nation’s largest and most reliable network and the nation’s best network for video streaming.** We’re building FirstNet just for first responders and creating next-generation mobile 5G. With DIRECTV and DIRECTV NOW, we deliver entertainment people love to talk about. Our smart, highly secure solutions serve over 3 million global businesses – nearly all of the Fortune 1000. And worldwide, our spirit of service drives employees to give back to their communities. AT&T Communications is part of AT&T Inc.
References:
AT&T to deploy 5G-ready connectivity services for Frisco Station urban development
Global Data: 5G Enterprise Market Business Case May NOT Be Compelling
Is it possible for anyone to throw cold water on the 5G market potential and diminish ultra hyped expectations? YES!
5G use cases may not be compelling enough for massive uptake by businesses, according to Kathryn Weldon, technology research director at GlobalData. Weldon offered her view on upcoming challenges for mobile operators:
“While 5G services are not yet ‘live’ this next generation of wireless technology is already top of mind for service providers, original equipment manufacturers (OEMs) and other telecom market ecosystem players. Aside from gearing up to build out the technology, they will be working together to make sure that 5G use cases are compelling – that is, different enough from 4G to matter to customers. As with any new generation of wireless, the stakes are high, and operators are hoping that they’ll make back their substantial investments in 5G. For most operators, this should come via a ‘massive’ uptake of connectivity, plus revenues from advanced services spanning both consumers and business customers.”
Operators need to move beyond their current barrage of technology build-out narratives and discussions of fixed vs. mobile services, she emphasized. “Rather, it’s the use cases and business outcomes that will make the difference. Operators need to deliver novel and compelling capabilities that change how business customers see and use cellular services.”
Enterprises have different requirements than consumers:
“As 5G communications traffic is expected from Internet of Things (IoT) sensors in industrial robots, roads, and vehicles and can leverage the technology’s reliability and low latency to control critical services and infrastructure for public safety, healthcare, government organizations, and utilities. But the ROI for these applications must be compelling.”
Weldon further acknowledged that questions remain:“Will the enterprise appetite to spend more to use these futuristic use cases exist when 5G networks become a reality? Will devices to support these applications be in place once those networks are ready? Will businesses finally see wireless as a valid replacement for wireline broadband? And lastly, will operators be able to offer all these futuristic services profitably? Only time will tell.
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Last year, Global Data said 5G networks will become mainstream by 2020, but Europe will lag behind Asia and the US, as operators seek to make the most of 4G, according to GlobalData, a recognized leader in providing business information and analytics. The company’s 5G report forecasts that while over half of all mobile subscriptions will be 5G-capable in South Korea by 2022, compared only around 7% in Europe.
5G will, for the first time, go beyond increased bandwidth and capacity, as was the focus in previous wireless generations, adding low latency, high density and high reliability. These capabilities will enable a variety of use cases, opening the door to new, predominantly business-focused services such as self-driving cars and smart cities. 5G also supports the focus that many operators have in looking for new, adjacent revenue streams, including fixed-mobile integration, digital content and the Internet of Things.
Peter Jarich, Chief Analyst for GlobalData Technology, adds: “Hopes are running high for the potential of 5G to truly transform mobile business models, and tap new revenue opportunities moving beyond consumers and into diverse digital industries. The implications go beyond any individual operator to impact national and regional competitiveness.
“Despite this, for all the efforts to fast-track early 5G deployments, it’s important to recognize that 5G rollouts will take years to complete; no region or country has won or lost the race to 5G yet.”